GBPCAD is approaching the 2022 High made on Jan 6th. Price action around this level should determine the short term direction for us to jump in.
A breakout above this level could give us a nice risk/reward trade to follow the trend and ride it up to the next key level of resistance, an area that seemed to see a magnetic effect followed by reversals a number of times in 2021 (5+ times depending on how you measure this).
Alternatively, the Jan 6th high will be a level a large number of traders will be watching and price is starting to look a little overextended.
This previous high could easily act as resistance and see a nice reversal. Price has been respecting an upward trendline and trading steadily above the 20 SMA/EMA, but price has seen a couple of spikes toward this high followed by quick rejections, and momentum for GBP appears to be weakening, as can be seen in the Currency Meter indicator where average GBP RSI is decreasing.
An aggressive short entry would be a close below the rising trendline. With closes below the SMA/EMA being more conservative short entries.
If price reverses I expect to see a temporary pullback not a full reversal, with expectation of a higher low on the Daily.
Overall I'd be happier to see a reversal and take a short, but I'll be watching price action and will jump into a long if we see a strong push and hold above the previous high with broader strength from GBP and broader weakness from CAD on the Currency Meter.
A breakout above this level could give us a nice risk/reward trade to follow the trend and ride it up to the next key level of resistance, an area that seemed to see a magnetic effect followed by reversals a number of times in 2021 (5+ times depending on how you measure this).
Alternatively, the Jan 6th high will be a level a large number of traders will be watching and price is starting to look a little overextended.
This previous high could easily act as resistance and see a nice reversal. Price has been respecting an upward trendline and trading steadily above the 20 SMA/EMA, but price has seen a couple of spikes toward this high followed by quick rejections, and momentum for GBP appears to be weakening, as can be seen in the Currency Meter indicator where average GBP RSI is decreasing.
An aggressive short entry would be a close below the rising trendline. With closes below the SMA/EMA being more conservative short entries.
If price reverses I expect to see a temporary pullback not a full reversal, with expectation of a higher low on the Daily.
Overall I'd be happier to see a reversal and take a short, but I'll be watching price action and will jump into a long if we see a strong push and hold above the previous high with broader strength from GBP and broader weakness from CAD on the Currency Meter.
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